New Residential taps $25-par market; Annaly Capital preferreds gain; Athene lower

By James McCandless

San Antonio, June 25 – The preferred space swung largely negative to end trading on Tuesday.

New Residential Investment Corp. priced a $135 million offering of $25-par series A fixed-to-floating rate cumulative redeemable preferred stock at par with an initial dividend of 7.5%.

Leading the day’s secondary activity, Annaly Capital Management, Inc.’s new 6.75% series I fixed-to-floating rate cumulative redeemable perpetual preferred stock gained.

Meanwhile, retirement name Athene Holding Ltd.’s 6.35% series A fixed-to-floating rate perpetual non-cumulative preference shares ended lower.

In oil and gas, Energy Transfer Operating, LP’s 7.6% series E fixed-to-floating rate cumulative redeemable perpetual preferred units declined.

Elsewhere, in utilities, Dominion Energy, Inc.’s 5.25% 2016 series A enhanced junior subordinated notes due 2076 edged up.

Insurance name Brighthouse Financial, Inc.’s 6.6% series A non-cumulative perpetual preferreds dove.

New Residential prices

In the primary space, New Residential priced a $135 million offering of $25-par series A fixed-to-floating rate cumulative redeemable preferred stock at par with an initial dividend of 7.5%.

There is a $20.25 million greenshoe.

The deal was announced on Tuesday morning.

BofA Securities, Inc., Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, RBC Capital Markets, LLC, UBS Securities LLC, Citigroup Global Markets Inc. and Keefe, Bruyette & Woods, Inc. are the joint bookrunners.

The preferreds are redeemable on or after Aug. 15, 2024. Prior to that, they are redeemable within 120 days after a change-of-control event.

The dividend is fixed until Aug. 15, 2024, then converts to Libor plus a spread.

Annaly Capital gains

Leading Tuesday’s activity, Annaly Capital’s new 6.75% series I fixed-to-floating rate cumulative redeemable perpetual preferred stock saw a gain.

The preferreds, trading under the temporary symbol “ACAXP,” added 11 cents to close at $24.85 on volume of about 1.8 million shares.

On Monday, the preferreds gained 1 cent.

Athene edges lower

Meanwhile, in the retirement space, Athene’s 6.35% series A fixed-to-floating rate perpetual non-cumulative preference shares were lower by the close.

The preferreds (NYSE: ATHPrA) edged down 1 cent to close at $26.08 with about 818,000 shares trading.

On Monday, the preferreds dipped 1 cent.

Energy Transfer off

In oil and gas, Energy Transfer’s 7.6% series E fixed-to-floating rate cumulative redeemable perpetual preferred units declined as the session ended.

The preferreds (NYSE: ETPPrE) lost 12 cents to close at $24.81 on volume of about 609,000 shares.

Dominion Energy up

Elsewhere, in utilities, Dominion Energy’s 5.25% 2016 series A enhanced junior subordinated notes due 2076 saw a slight gain.

The notes (NYSE: DRUA) picked up 4 cents to close at $25.48 with about 560,000 notes trading.

Brighthouse drops

Insurance name Brighthouse’s 6.6% series A non-cumulative perpetual preferreds saw a large drop.

The preferreds (Nasdaq: BHFAP) fell 44 cents to close at $26.04 on volume of about 426,000 shares trading.

On Tuesday morning, analysts from Credit Suisse downgraded the name, saying that the prospect of lower interest rates meant less revenue over the next three years.

Indexes down

The Wells Fargo Hybrid & Preferred Securities Financial index was down 0.06% at the close, falling from a 0.01% gain in early Tuesday trading.

The iShares US Preferred Stock ETF was down 7 cents to $36.86.

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